Eni (E) Misses on Q1 Earnings, Expects Higher '24 Production

Eni SpA E reported first-quarter 2024 adjusted earnings from continuing operations of $1.04 per American Depository Receipt (ADR), which missed the Zacks Consensus Estimate of $1.22. The bottom line declined from the year-ago quarter’s $1.85.

Total quarterly revenues of $25.2 billion declined from $29.4 billion recorded a year ago. However, the top line beat the Zacks Consensus Estimate of $18.8 billion.

The company’s weak quarterly earnings resulted from lower natural gas price realization.

Eni SpA Price, Consensus and EPS Surprise

 

Eni SpA Price, Consensus and EPS Surprise

Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote

Operational Performance

Eni operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Enilive Refining and Chemicals, and Plenitude & Power.

Exploration & Production

The total oil and gas production in the first quarter was 1,741 thousand barrels of oil equivalent per day (MBoe/d), up 5% from the 1,661 recorded in the prior-year quarter.

Liquids’ production totaled 797 thousand barrels per day (MBbl/d), up 2% from the year-ago quarter’s 780 MBbl/d. Natural gas production increased to 4,937 million cubic feet per day from the 4,608 recorded a year ago.

The average realized price of liquids was $74.53 per barrel, up from the $72.86 reported a year ago. Yet, the realized natural gas price was $7.04 per thousand cubic feet, down 13% from the $8.06 registered in the year-ago period.

Lower natural gas price realization hurt the company’s Exploration & Production segment. The segment reported a proforma adjusted Ebit of €3.3 billion, down from the €3.8 billion recorded in the March-end quarter of 2023.

Global Gas & LNG Portfolio

Eni’s worldwide natural gas sales in the reported quarter totaled 15.45 billion cubic meters (bcm), down 4% year over year.

The integrated energy major’s Global Gas & LNG Portfolio business segment reported a proforma adjusted Ebit of €325 million, marking a significant decline from the year-ago quarter’s €1,420 million. The significant reduction was primarily led by a less favorable pricing environment and diminished volatility, which negatively impacted trading and optimization opportunities.

Refining, Chemicals & Power

For the first quarter, total refinery throughputs were 6.39 million tons (mmtons) compared with 6.71 in the corresponding period of 2023. Petrochemical product sales increased 12% year over year to 0.90 mmtons.

For the quarter under review, the segment reported a proforma adjusted Ebit of €44 million, down from the €223 million reported in the year-ago quarter. The decline can be attributed to reduced refining margins across all regions and decreased throughput.

Enilive & Plenitude

Retail gas sales managed by Plenitude declined 12% year over year to 2.56 bcm.

The company reported a proforma adjusted Ebit of €420 million from this segment, marking a 56% year-over-year increase.

Financials

As of Dec 31, Eni had a long-term debt of €22.7 billion, and cash and cash equivalents of €8.8 billion.

For the reported quarter, net cash generated by operating activities was €1.9 billion. Capital expenditure totaled €1.9 billion.

Outlook

For 2024, the company forecasts the hydrocarbon production in the exploration and production segment between 1.69 million and 1.71 million barrels of oil equivalent per day, based on a revised Brent price of $86 per barrel. The metric indicates an increase from the 1.66 million barrels of oil equivalent per day reported in 2023.

Zacks Rank & Stocks to Consider

Eni currently carries a Zack Rank #3 (Hold).

Investors interested in the sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy Company SM is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.

The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.33 and $6.96, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Hess Corporation HES is a leading oil and natural gas exploration and production company. The exploration and production company’s oil and gas proved reserves increased last year by more than 8% year over year.

The Zacks Consensus Estimate for HES’s 2024 and 2025 EPS is pegged at $8.33 and $10.49, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

Ecopetrol S.A. EC operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.

Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.77 and $2.29, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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